'Mashaba is covering up violations of bid process'

Johannesburg - Joburg mayor Herman Mashaba is being accused of covering up gross irregularities in a multimillion-rand tender process.

Mashaba’s office has denied these allegations, despite a damning internal forensic report, which The Star has seen, that shows price inflation in a contract to conduct an institutional review within the city, where the winning company charged over R21million more than the cheapest bid received.

Mashaba received the report in March, but has been accused by senior officials of shielding the city manager, Dr Ndivhoniswani Lukhwareni, and several executives from disciplinary action over alleged tender violations.

According to the report, Neo Africa Solutions JV was “irregularly” awarded the contract for R29.9m, despite the initial bid specifications capping the budget at R15m and where another company, City Insights, had a bid of R8.5m.

The tender was rescinded in November after City Insights challenged the city in court, where the two parties reached an out-of-court settlement.

In December, the city paid more than R7m to Neo Africa for work it had already done during the review, in what the investigation called “irregular expenditure”.

It emerged from the report that Neo Africa commenced work without receiving a letter of appointment or signing a service-level agreement, which is in itself irregular.

The investigation, which was signed-off by General Shadrack Sibiya, head of Joburg’s crime and corruption-fighting unit, detailed flouting of supply-chain management laws, including “irregular” alteration of the bid specifications’ terms of reference, budget, and the duration period of the contract.

SM Xulu Auditors compiled an integrity report during the procurement process, which recommended against awarding the tender because the city’s executives had disregarded the bid processes.

Sibiya’s report, which the council commissioned in December, slammed the city manager for exposing the city to potential litigation by failing to ensure the implementation of the probity report, and for instructing Christo Marais, who chaired the bid specification committee, to engage Neo Africa before the tender processes had been finalised, “thus exposing the (city) to potential litigation risk”.

The report said Neo Africa was introduced to Mashaba in July as the appointed service providers without any agreements being signed.

Professor Rabelani Dagada, who is the former member of the mayoral committee for finance, said he had warned Mashaba at the July meeting that it was wrong to meet Neo Africa before the tender process had been concluded.

“Secondly, I made it very clear that it was illegal that the service provider had already done substantial work before a formal appointment had been made,” Dagada told The Star.

Mayoral spokesperson Luyanda Mfeka did not respond to Dagada’s allegations but denied claims of a corruption cover-up by Mashaba.

Mfeka said the report was sent to the municipal public accounts committee (MPAC) in March “to ensure absolute executive accountability and transparency in this process”.

Lillian Kolisang, spokesperson for the speaker of the council, Vasco da Gama, said MPAC chairperson Thandi Nontenja had stated that the report would be tabled and “receive full attention” next month, as “the committee was currently preoccupied with the auditor-general’s annual report on the city”.

Insinuating that the MPAC process “constitutes anything less than the city operating to the high standards set by Mashaba is without basis”, Mfeka insisted.

“This case involves neither corruption nor a cover-up, and I’m reiterating that there has been no finding of fraud or corruption.

“The findings are related to supply-chain processes being flawed.

“Equally, there is no cover-up because a forensic investigation was initiated, and brought to council within four months, and council has adopted recommendations to determine the corrective action envisioned in the report.”

Mfeka said it was worth noting that no previous government in the City of Joburg had tabled a forensic report in the council, and operated with this degree of transparency.

On why Lukhwareni had ignored the integrity report which had warned against awarding the tender, Mfeka said the question was “factually incorrect” and did not warrant a response.